| Sursa dumneavoastra de Estates si Real Estate Law ; What is estate planning vs. will drafting |
I always think of September as “back to school” time. Even though I am no longer a student, I still think of it as a new beginning and a fresh start to turn the page and be optimistic about what the next 12 months will bring. A lot of us take a break from our “to do” list in the summer to spend more time with family, appreciate the beautiful weather or just enjoy a slower pace of life. COVID seems to have thrown this schedule off a little bit, as a lot of us felt more comfortable to use the summer to cross things off our list.
However, as things ramp up in September, there is still some mystery in the air. Perhaps it has to do with the fresh September air, the federal election, about how life will transpire with the reopening of the economy, or just our optimism that we will turn over a new (better) leaf.
I find that fall is a good time for preparing one’s estate plan. Most of my clients feel more rested and ready to tackle this important matter. I always advise my clients to be proactive about preparing an estate plan (not just as will) if it has been at least five years since the last estate plan or there was a major change in their life (marriage, divorce, separation, children, grandchildren, downsizing, significant change to assets, etc.).
There is more to estate planning than just writing a will. In fact, having your will done is the last piece of the puzzle. Much work needs to be done before that to ensure that the will is properly prepared. Thorough estate planning means accounting for a smooth transition for the survivors, and making their life easier when you pass away.
Here is what you need to get started with your estate plan:
1. Make a list of all your physical assets (your home, your car, jewellery, art, etc.)
2. Make a list of non-physical assets (your bank accounts, your investments, life insurance, etc.)
3. Put together a list of your debts (such as mortgages, lines of credit, loans, etc.)
4. Verify the beneficiaries for all registered accounts (such as TFSA, RRSP, etc.), and life insurance policies; review them to ensure the beneficiaries are current and are listed in accordance with your wishes
5. Review any assets held in joint ownership with someone else and consider whether you still want that person to inherit your asset by right of survivorship
6. Plan for transfer of assets on death:
o assets which are held jointly with someone will pass to that person by right of survivorship (in most cases) and will by-pass your estate
o assets with listed beneficiaries will pass to that beneficiary and will also by-pass your estate (in most cases)
o for any assets that are left over, they will be distributed in accordance with your wishes (as laid out in your Will) or in accordance with intestacy laws
7. Having a lawyer help you with estate planning
o An estate planning lawyer will help you review your estate plan in its entirety, will explain the consequences of your current asset ownership structure, will offer solutions to save you money, will discuss an appropriate executor appointment, will address the need for setting up any trusts, will discuss family dynamics, and will suggest appointing a guardian for minor children.
o Other important documents of estate planning are the Powers of Attorney for Property and Personal Care. Your lawyer will assist you in appointing the best attorneys to handle your finances and personal care and explain certain risks which arise with creating the powers of attorney documents.
As you can see, your estate planning lawyer is not just a transactional lawyer. They need to be somebody sensible and trustworthy because you entrust them with a lot of information about yourself. They will learn about your assets, your relationship with your spouse and your children, including extended family dynamics. I advise my clients about why the person they originally wanted to appoint as an executor is not a good selection and sometimes, I even counsel my clients on how to proceed regarding sensitive topics of discussion with their families.
Do you have questions about this topic and want to chat? I would love to hear back from you!
PLEASE NOTE THAT THE CONTENT OF THIS BLOG IS MERELY FOR INFORMATION PURPOSES AND DOES NOT CONSTITUTE LEGAL ADVICE.
Raluca M. Soica, BBA, CPA, CMA, JD
Barrister & Solicitor
Raluca M. Soica, Toronto 9/7/2021